WHAT PROPORTIONOF NHS AND
PHLS SPENDHASBEENON
IT AND INFORMATION
SERVICESANDISTHE
PROPORTIONOF
SPEND PLANNEDTO INCREASEINTHE
NEAR FUTURE?

For the NHS

Recent surveys show that the NHS continues to
invest about two per cent or £850 million of its annual baseline
revenue allocation on maintaining existing IT and information
services and purchasing new IT. This figure compares closely with
those used in "Securing Our Future health: taking a long
term view" (April 2002)the report of the independent
review of NHS resources requirements by Derek Wanless. Spending
has remained constant since the initial figures were collected
in 1999-2000.

For 2003-04 the NHS is planning to maintain
its baseline and increase investment in local infrastructure and
systems by up to a further £200 million.

In addition for England there is a National
Programme for IT. The sums allocated over the next three years
for this are 2003-04 £400 million, 2004-05 £700 million,
and 2005-06 £1,200 million. This is in addition to baseline
spend.

The current figures for the PHLS are 2 per cent
of revenue on IT and information services and 10 per cent of capital
allocation about £0.5 million. With the setting up of the
Health Protection Agency the role of the PHLS will change but
its spend on IT is likely to continue at this level.

Financial institutions such as banks and building
societies are said to spend eight to 12 per cent of their revenue
on IT and information services. In companies with mature systems
this has fallen to five per cent. The Wanless Report provides
some data on this in the form of spending per employee:

Service

Spend per employee

NHS

£1,000

Gov'n other

£3,000

Manu'f

£3,500

Utilities

£3,900

Financial

£9,000

Please note that this is not an entirely valid comparison.
Core NHS services depend on the interaction between people and
in many areas the NHS needs more staff than it currently has.
IT is being installed to facilitate the work of professionals
rather than replace them. In the Financial sector workforce numbers
reduced substantially as a result of IT investment so the investment
per person is correspondingly high.